211122, 209 PM GR No. 17664
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G.R.No. 1776 Gener Orers yor 28, 2009
cial Orders
CRC AGRICU.s ncn srarwenew and ROLANDO B. CATINDIG, Petitioners,
vs
NATIONAL LABOR RELATIONS COMMISSION and ROBERTO OBIAS, Respondents,
DECISION
BRION, J.
Before this Court is the Petition for Review on Certiorari under Rule 45 of the Rules of Court assailing the Decision’
of the Court of Appeals (CA) dated February 20, 2007 and its related Resolution dated Apri 30, 20072 in CA-GR.
SP No. 95824. The assailed decision reversed and set aside the August 15, 2006 Resolution? of the National Labor
Relations Commission (NLRC), and reinstated the Labor Abiter’s April 15, 2005 Decision finding respondent
Roberto Obias (respondent) ilegaly dismissed from his employment.
ANTECEDENT FACTS
‘The present petition traces its roots to the complaint® for illegal dismissal filed by the respondent against petitioners
(ORC Agricultural Trading and its owner, Rolando B, Catindig (collectively, petitioners), before the Labor Arbiter on
June 22, 2004.
In his Sinumpaang Selaysay,® the respondent alleged that the [petitioners employed him as a driver sometime in
1985, The respondent worked for the pelitioners until he met an accident in 1989, after which the petitioners no
longer allowed him to work. After six years, or in February 1995, the petitioners again hired the respondent as.
diver and offered him to stay inside the company's premises, The petitioners gave him a 3,000.00 loan to help him
build a hut for his family,
Sanerme in aren 200, to patonrs ordered respondent 19 have the aerator of one of veils repaed.
‘ho aepondent ought the wanele separ shop and supsequenty gave te paltonars we recnpes onved by
‘suspected that the receipts were falsified and stopped talking to him and giving him work
the repair shop. The latter
‘assignments: The petitioners, however, stil paid him P700.00 and P500.00 on April 15 and 30, 2004, respectively,
but no longer gave him any salary after that. As a result, the respondent and his family moved out of the petitioners’
Compound and relocated to a nearby place. Thelrespandenticiaimed thatthe etitoners ald him-a-dally wage’ ot
that the peilioners did not send him a notice of termination
In opposing the complaint, the his
and was not fixed. The petitioners paid the respondent ut under
petitioners also gave him a daily allowance of P140.00 to 200.00. In April 2003, the respondent worked only for 15
days for which he was paid the agreed wages. The petitioners maintained that they did not anymore engage the
respondent's services after April 2003, as they had already lost trust and confidence in him after discovering that he
had forged receipts for the vehicle parts he bought for them. Since then, the respondent had been working as a
driver for different jeepney operators.”
‘The Labor Art
ter Ruling
Labor Arbiter Rennell Joseph R. Dela Cruz, in his decision of April 15, 2005, ruled in the respondent's favor
declaring that he had been illegally dismissed. The labor arbiter held that as a regular employee, the respondent's
services could only be terminated after the observance of due process. The labor arbiter likewise disregarded the
Petitioners’ charge of abandonment against the respondent. He thus decreed:
htpsawphineujudurisur2008/dec2009\gr_177664_2009.ntml
18211/22, 209M G.R.No. 17664
WHEREFORE, premises considered, judgment is hereby rendered ordering respondents CRC AGRICULTURAL
TRADING and ROLANDO CATINDIG to pay complainant jointly and severally the following:
Separation Pay - P64,740.00
Backwages
Basic pay -P146,491.80
43th month pay - 12,207.65
SIL - 2,347.63
Salary Differential - 47,944.00
Unpaid SIL - 3,467.00
277,198.08
10% attorney's fees - 27,719.80
GRAND TOTAL - 304,917.80
SO ORDERED?
‘The NLRC Ruling
‘The petitioners and the respondent both appealed the labor arbiter’s decision to the NLRC. The petitioners
specifically questioned the ruling that the respondent was illegally dismissed. The respondent, for his part,
maintained that the labor arbiter erred when he ordered the payment of separation pay in ieu of reinstatement.
‘The NLRC, in its resolution of August 15, 2006, modified the labor arbiter's decision. The NLRC ruled that the”
respondent was not illegally dismissed and deleted the labor arbiter's award of backwages and attorney's fees. The
NLRC reasoned out that it was respondent himself who decided to move his family out of the petitioners’ lot; hence,
no illegal dismissal occurred. Moreover, the respondent could not claim wages for the days he did not work, as he
‘was employed by the petitioners under a "no work no pay" scheme.
‘The CA Decision
‘The petitioners filed on August 30, 2006 a petition for certiorari with the CA alleging that the NLRC erred in awarding
the respondent separation pay and salary differentials. They argued that an employee who had abandoned his,
work, like the respondent, is no different from one who voluntarily resigned: both are not entitled to separation pay
and to salary differentials. The petitioners added that since they had already four regular drivers, the respondent's
job was already unnecessary and redundant, They further argued that they could not be compelled to retain the
services of a dishonest employee,
The GA, in its decision dated February 20, 2007, reversed and set aside the NLRC resolution dated August 15,
£2006, and reinstated the labor arbiter's Apri 15, 2005 decision.
‘The CA disregarded the petitioners’ charge of abandonment against the respondent for their failure to show that
there was deliberate and unjustified refusal on the part of the respondent to resume his employment. The CA also
ruled that the respondent's fling of a complaint for illegal dismissal manifested his desire to retum to his job, thus
negating the petitioners’ charge of abandonment. Even assuming that there had been abandonment, the petitioners
denied the respondent due process when they did not serve him with two written notices, Le., (1) a notice which
apprises the employee of the particular acts or omissions for which his dismissal is sought; and (2) a subsequent
notice which advises the employee of the employer's decision to dismiss him. Thus, the respondent is entitled to full
backwages without deduction of earnings derived elsewhere from the time his compensation was withheld from him,
Up to the time of his actual reinstatement. The CA added that reinstatement would no longer be beneficial to both
the petitioners and respondent, as the relationship between them had already been strained,
Petitioners moved to reconsider the decision, but the CA denied the motion for lack of merit in its Resolution dated
‘April 30, 2007,
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In the present petition, the petitioners alleged that the CA erred when it awarded the respondent separation pay,
backwages, salary differentials, and attorney's fees. They reiterated their view that an abandoning employee like
respondent is not entitled to separation benefits because he is no different from one who voluntarily resigns.
‘THE COURT'S RULING
‘We do not find the petition meritorious.
The existence of an employer-employee relationship
A paramount issue that needs to be resolved before we rule on the main issue of illegal dismissal is|whether there.
existed an employer-employee relationship between the petitioners and the respondent. This determination has
been rendered imperative by the petitioners’ denial of the existence of employer-employee relationship on the
reasoning that they only called on the respondent when needed,
‘The elements to determine the existence of an employment relationship are: (1) the selection and engagement of
the employee; (2) the payment of wages; (3) the power of dismissal; and (4) the employer's power to control the
employee's conduct. The most important element is the employer's control of the employee's conduct, not only as to
the result of the work to be done, but also as to the means and methods to accomplish it. All the four elements are
present in this caso,"
First;the petitioners engaged the services of the respondent in 1995, Second] the petitioners paid the respondent a
daily wage of P175.00, with allowances ranging from 140.00 to 200.00 per day. The fact the respondent was paid
under a “no work no pay” scheme, assuming this claim to be true, is not significant. The “no work no pay" scheme is
merely a method of computing compensation, not a basis for determining the existence or absence of employer
employee relationship. Third, the petitioners’ power to dismiss the respondent was inherent in the fact that they
engaged the services of the respondent as a driver. Finally, a careful review of the record shows that the respondent
performed his work as driver under the petitioners’ supervision and control. Petitioners determined how, where, and
when the respondent performed his task. They, in fact, requested the respondent to live inside their compound so he
(respondent) could.be_readily available when. the petitioners needed his. services. Undoubtedly, the petitioners
exercised control over the means and methods by which the respondent accomplished his work as a driver.
We conclude from all these that an employer-employee relationship existed between the petitioners and respondent.
‘The respondent did not abandon his job
In a dismissal situation, the burden of proof lies with the employer to show that the dismissal was for a just cause. In
the present case, the petitioners claim that there was no illegal dismissal, since the respondent abandoned his job.
‘The petitioners point out that the respondent freely quit his work as a driver when he was suspected of forging
vehicle parts receipts.
‘Abandonment of work, or the deliberate and unjustified refusal of an employes to resume his employment, is a just
cause for the termination of employment under paragraph (b) of Article 282 of the Labor Code, since it constitutes
neglect of duty." The jurisprudential rule is that abandonment is a matter of intention that cannot be lightly
presumed from equivocal acts, To constitute abandonment, two elements must concur: (1) the failure to report for
work or absence without valid or justifiable reason, and (2) a clear intent, manifested through overt acts, to sever the
employer-employee relationship. The employer bears the burden of showing a deliberate and unjustified refusal by
the employee to resume his employment without any intention of returning. "2
In the present case, the petitioners did not adduce any proof to show that the respondent clearly and unequivocally
intended to abandon his job or to sever the employer-employee relationship. Moreover, the respondent's filing of the
complaint for illegal dismissal on June 22, 2004 strongly speaks against the petitioners’ charge of abandonment; itis
illogical for an employee to abandon his employment and, thereafter, file a complaint for illegal dismissal. As we held
in Samarea v. Arc-Men Industries, Inc."
Abandonment is a matter of intention and cannot lightly be presumed from certain equivocal acts. To constitute
abandonment, there must be clear proof of deliberate and unjustified intent to sever the employer-employee
relationship. Clearly, the operative act is still the employee's ultimate act of putting an end to his employment.
[Emphasis in the original]
Respondent was constructively dismissed
Case law defines constructive dismissal as a cessation of work because continued employment has been rendered
impossible, unreasonable, or unlikely, as when there is a demotion in rank or diminution in pay or both or when a
clear discrimination, insensibiliy, or disdain by an employer becomes unbearable to the employes.
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‘The test of constructive dismissal is whether a reasonable person in the employee's position would have felt
compelled to give up his position under the circumstances. It is an act amounting to dismissal but is made to appear
as if it were not. In fact, the employee who is constructively dismissed might have been allowed to keep coming to
work, Constructive dismissal is therefore a dismissal in disguise. The law recognizes and resolves this situation in
favor of employees in order to protect their rights and interests from the coercive acts of the employer."
In the present case, the petitioners ceased verbally communicating with the respondent and giving him work
assignment after suspecting that he had forged purchase receipts. Under this situation, the respondent was forced
to leave the petitioners’ compound with his family and to transfer to a nearby place. Thus, the respondent's act of
leaving the petitioners’ premises was in reality not his choice but a situation the petitioners created,
‘The Due Process Requirement
Even assuming that a valid ground to dismiss the respondent exists, the petitioners failed to comply with the twin
requirements of notice and hearing under the Labor Code,
‘The long established jurisprudence holds that to justify the dismissal of an employee for a just cause, the employer
must furnish the worker with two written notices, The first is the notice to apprise the employee of the particular acts
cr omissions for which his dismissal is sought. This may be loosely considered as the charge against the employee.
‘The second is the notice informing the employee of the employer's decision to dismiss him. This decision, howaver,
must come only after the employee is given a reasonable period from receipt of the first notice within which to
answer the charge, and ample opportunity to be heard and defend himself with the assistance of his representative,
if he so desires. The requirement of notice is not a mere technicality, but a requirement of due process to which
every employee is entitled,
‘The petitioners clearly failed to comply with the two-notice requirement. Nothing in the records shows that the
petitioners ever sent the respondent a written notice informing him of the ground for which his dismissal was sought
It does not also appear that the petitioners held a hearing where the respondent was given the opportunity to
answer the charges of abandonment, Neither did the petitioners send a written notice to the respondent informing
the latter that his service had been terminated and the reasons for the termination of employment. Under these
facts, the respondent's dismissal was illegal."
Backwages, Separation Pay, and Attorney's Fees
‘The respondent's illegal dismissal carries the legal consequence defined under Article 279 of the Labor Code: the
illegally dismissed employee is entitled to reinstatement without loss of seniority rights and other privileges and to
his full backwages, inclusive of allowances and other benefits or their monetary equivalent, computed from the time
his compensation was withheld from him up to the time of his actual reinstatement. Thus, an illegally dismissed
employee is entitled to two reliefs: backwages and reinstatement. Where reinstatement is no longer viable as an
option, backwages shall be computed fram the time of the illegal termination up to the finality of the decision. 17
Separation pay equivalent to one month salary for every year of service should likewise be awarded as an
alternative in case reinstatement in not possible."®
In the present case, reinstatement is no longer feasible because of the strained relations between the petitioners
and the respondent. Time and again, this Court has recognized that strained relations between the employer and
employee is an exception to the rule requiring actual reinstatement for illegally dismissed employees for the practical
reason that the already existing antagonism will only fester and deteriorate, and will only worsen with possible
adverse effects on the parties, if we shall compel reinstatement; thus, the use of a viable substitute that protects the
interests of both parties while ensuring that the law is respected,
In this case, the antagonism between the parties cannot be doubted, evidenced by the petitioners’ refusal to talk to
the respondent after their suspicion of fraudulent misrepresentation was aroused, and by the respondent's own
decision to leave the petitioners’ compound together with his family. Under these undisputed facts, a peaceful
working relationship between them is no longer possible and reinstatement is not to the best interest of the parties.
‘The payment of separation pay is the better alternative as it liberates the respondent from what could be a highly
hostile work environment, while releasing the petitioners from the grossly unpalatable obligation of maintaining in
their employ a worker they could no longer trust.
‘The respondent having been compelled to litigate in order to seek redress, the CA correctly affirmed the labor
arbiter's grant of attorney's fees equivalent to 10% of the total monetary award"?
‘The records of this case, however, are incomplete for purposes of computing the exact monetary award due to the
respondent. Thus, it s necessary to remand this case to the Labor Arbiter for the sole purpose of computing the
proper monetary award
htpstawphineujudurisur2008/dee2008\gr_177664_2009.ntml211122, 209 PM GR No. 17664
WHEREFORE, premises considered, we hereby DENY the petition, The Decision of the Court of Appeals dated
February 20, 2007 and its Resolution dated April 30, 2007 in CA-G.R. SP No, 95924 are AFFIRMED and the case is
REMANDED to the Labor Arbiter for the sole purpose of computing the full backwages, inclusive of allowances and
other benefits of respondent Roberto Obias, computed from the date of his dismissal up to the finality of the
decision, and separation pay in lieu of reinstatement equivalent to one month salary for every year of service,
computed from the time of his engagement up to the finality ofthis decision.
SO ORDERED.
ARTURO D. BRION
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO MARIANO C. DEL CASTILLO
Associate Justice Associate Justice
ROBERTO A. ABAD
Associate Justice
ATTESTATION
| attest that the conclusions in the above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Court's Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
Pursuant to Section 13, Article VIll of the Constitution, and the Division Chairperson’s Altestation, it is hereby
certified that the conclusions in the above Decision were reached in consultation before the case was assigned to
the writer of the opinion of the Court's Division.
REYNATO S. PUNO
Chief Justice
Footnotes
* Penned by Associate Justice Jose Catral Mendoza, and concurred in by Associate Justice Remedios A,
Salazar-Feiando and Associate Justice Ramon M. Bato, Jr. rollo, pp. 64-74.
214, at a2
3d, at 30-36,
4 1d, at 25-29.
5d, at 20.
Sd, at 23-24,
Tid, at 21-22.
8 id, at29,
° Supra note 3,
10 See Chavez v, National Labor Relations Commission, 489 Phil. 444 (2005).
htpsawphinetjudurisur2008/dec2008\gr_177664_2009.ntml211/22, 209M G.R.No. 17664
“1 See Victory Liner, Inc. v. Race, G.R. No. 164820, March 28, 2007, 519 SCRA 366, 373.
‘2 Pentagon Steel Corporation v. Court of Appeals, G.R. No. 174141, June 26, 2008.
*9 459 Phil, 508, 516 (2003).
“4 La Rosa v. Ambassador Hotel, G.R. No. 177059, March 13, 2009; Segue v. Triumph Intemational (Phils),
Inc., G.R. No. 164804, January 30, 2009, 577 SCRA 323, 333.
*8 Uniwide Sales Warehouse Club v. National Labor Relations Commission, G.R, No. 154503, February 29,
2008, 547 SCRA 220, 236,
16 Mendoza v. National Labor Relations Commission, 350 Phil. 486 (1998).
‘7 See RBC Cable Master System v. Baluyot, G.R. No. 172670, January 20, 2009, 576 SCRA 668, 679.
18 See Mt. Carmel College v. Resuena, G.R. No. 173076, October 10, 2007, 535 SCRA 518, 541.
+8 Macasero v. Southern Industrial Gases Philippines, G.R. No. 178524, January 30, 2009, 577 SCRA 500,
507.
dee a
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